Archives for April 2010

How To Find Underpriced Real Estate Deals

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In real estate, there is a saying that you don't make your money when you sell, you make your money when you buy. The name of the game is finding amazing deals and then either keeping them for the long term or turning around and flipping for a handsome profit.

Of course, if great deals were that easy to find, everybody would be doing it. The forces of supply and demand would inflate the price of properties to the point that there would be no deals left!

Naysayers claim that this is true of today's housing market. But in reality, there are endless deals to be found almost anywhere at almost anytime. Finding these deals takes experience and talent, but this is a head start for novice investors – or a refresher course for old pros.

Distressed Owners Make for Distressed Properties…

…and vice versa. What is a great deal? Quite simply, it's when you buy a property for well below its actual value and/or with favorable terms. The only way this can happen is for the seller to be ignorant of the market, completely uninterested in profit motives, or extremely motivated to sell.

Your chances of making a career out of finding homes owned by people who don't know any better or who don't care are slim, so it's best to concentrate on identifying motivated or "distressed" sellers.

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3 Specific Attacks on Real Estate Investors by the Obama Administration

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(Part 1 of 3)

Let’s get straight to the heart of it:

Attack #1: Would it bother you if you learned that the Obama administration has specifically targeted investors like you and me for massive tax hikes?  These tax hikes apply only to investors and nobody else… Because you are an investor, you have specifically been targeted by this administration for financial penalization and increased government control of your business!

Attack #2: And would it bother you if you learned that the Obama administration has written regulations that make it illegal for you to sell any of your property via seller financing without first passing a government-created test and being registered with the federal government?  That’s exactly what’s happening, and all current information suggests these new regulations will take effect on July 1, 2010. Again, because you are a real estate investor, you have specifically been targeted by this administration for financial penalization and increased government control of your business!

Attack #3: And how does it make you feel that the Democrat-controlled U.S. House of Representatives has already passed a bill that will require that every home in America – including your personal residence, and every you own or acquire in the future – will have to pass a government inspection and certification before your home can be sold to any third party?

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U.S. Housing Market Intelligence Report (April 2010)

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Categories are graded from A thru F:

Economic Growth:  D+
Spending remains high and income improved, but the unemployment level remains very high. Overall economic growth improved slightly this month, and the results for our economic growth metrics were generally positive. The revised fourth quarter GDP growth rate increased to 5.6%. The pace of job losses eased this month, and the number of mass layoff events is plummeting, but employment has still declined 1.7% year over year.

The unemployment rate was flat this month at 9.7%, but the broader measure of unemployment, the U-6, increased to 16.9%. The length of unemployment in the labor force increased to 31.2 weeks this month, reaching a record high level since the BLS began tracking the statistic in 1948. Personal income improved and has returned to positive year-over-year growth for the second time since December 2008, increasing by 2.0%. The CPI (all items) increased to 2.3% from one year ago, while the Core CPI (minus food and energy) dropped to 1.1%.

Leading Indicators:  C+

Overall leading indicators held relatively steady this month, but several individual metrics actually improved. The Leading Economic Index has increased for the past eleven consecutive months. The ECRI Leading Index – an indicator of future U.S. growth – increased 13.9% year-over-year, and has experienced positive year-over-year growth for the past 10 months. Stocks improved once again in March, and all four major indices have now experienced large positive year-over-year growth, ranging from +43% to +57%.

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What's in your FICO Credit Score

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FICO Scores are calculated from a lot of different credit data in your credit report. This data can be grouped into five categories as outlined in the chart. The percentages in the chart reflect how important each of the categories are in determining your FICO score.

These percentages are based on the importance of the five categories for the general population. The importance of these categories may be somewhat different for particular groups. For example, people with new credit or those who have not been using credit for very long.

Payment History

  • Account payment information on specific types of accounts (credit cards, retail accounts, installment loans, finance company accounts, mortgage, etc.).
  • Presence of adverse public records (bankruptcy, judgments, suits, liens, wage attachments, etc.), collection items, and/or delinquency (past due items).
  • Severity of delinquency (how long past due).
  • Amount past due on delinquent accounts or collection items.
  • Time since (recency of) past due items (delinquency), adverse public records (if any), or collection items (if any).
  • Number of accounts paid as agreed.
  • Number of past due items on file.

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How to Create Your Own "Luck"

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Are you lucky? Research shows that few people answer in the affirmative when presented with that basic question. Of course, even the most preliminary reflection would demonstrate that “luck” is highly subjective at best – yet when asked about “luck” everyone seems to have a clear idea of what it entails… and who it seems to bestow itself upon.

Upon closer inspection, it appears that those considered “lucky” by themselves and others actually share several important traits. Savvy would do well to adopt these easy to implement practices in their personal and professional lives:

1. Proximity – Like the old adage “success breeds success” it seems your mother was right. The company you keep DOES matter! Learn how to put yourself in the right place at the right time with the right people by creating opportunities to learn from others, network and form strategic relationships that create ‘win-win’ opportunities for all involved.

2. Practice – You’ve heard it before but we'll say it again…practice really does make perfect. It’s one reason we bring in experts for our webinars as well as put together all the tools you need to get started. Rather than having to start from the beginning, you have the advantage of using our experience (and practice) to jump-start your own portfolio of properties.

3. Persistence – If at first you don’t succeed – try and try again… it’s actually good advice. Most “lucky” individuals are actually highly motivated and simply don’t stop. When evaluated by their number of failures, many are not extra-ordinary whatsoever. Instead, they simply persist when others stop.

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